If you know of the 80/20 principle, it simply states that 80 percent of your effort leads to only 20 percent of your income. The other side of the spectrum would say that 20 percent of your effort leads to 80 percent of the results.
In business, we often want that our efforts would be equal to or better than the results we get. Imagine if you only did an hour of work to get the results you want.
Getting more out of what you have done is what is called leverage.
What is leverage?
Imagine a see-saw. The point in the middle of the see-saw is a lever. In a see-saw, it balances the two riders with equal weight or it dips to one side if it not equal.
A lever can also be used to make tasks easier. A plank of wood plus a lever can move a heavy rock when the lever is closer to the rock. Imagine if the lever in the see-saw was moved closer to one side, a kid can balance out a heavier adult.
Leverage is one way we can have a greater impact in businesses. Adding leverage to tasks yields greater results or requires less effort to accomplish tasks.
What can you use as leverage?
There are four key aspects in business you can use as leverage. First would be systems and technology. Putting systems in place saves you time, energy and money as well as streamlines your business processes. Using technology to help you speed up your process can also be a form of leverage.
Secondly, improving delivery and distribution is a very important leverage. Getting your product to clients on time, every time, is crucial to profit. Ensuring distribution channels are free will get products to market quickly therefore increasing the possibility of making a sale.
Third would be accounting and auditing. As a business owner you need to know the figures. Know where you are strong and where you are weak. Focus on areas where you are strong to maximise them and improve where you are weak so that you can get better results.
Lastly, getting the right people and educating your staff. Getting the right people means that you won’t have a hard time training them or integrating them into your business. Education is also critical as leverage because the more skillful your employees are, the better they will be in performing tasks. A combination of having the right people and developing their skill sets with education will yield wonderful results.
What can hinder you from having leverage?
There are two major things that can hinder you from having leverage. The first is “I know” which means you know everything or you think you know everything about your business.
This will be a hindrance because growth comes from building skills and improving. If you know everything then there is nothing left to improve on.
Second would be “only I can do it” which is why a lot of business owners spend time doing what can be delegated. If you cannot trust someone else to perform tasks then you will be stuck with working in your business rather than working on your business.
Leverage will make life easier for any business owner.
With leverage, a little effort will go a very long way.
Remember, working smart is easier than working hard.